NFT Marketing: Scam or Success?

Companies are rushing to NFTs and spending thousands of dollars on these digital assets to innovate their marketing strategies while millions of people see NFTs as a scam. Let’s look at why companies like Nike, the New York Rangers and Taco Bell are dipping their toes into Web 3.0 and trying to change the public’s opinion on NFTs.

Just about everyone knows that NFT stands for “non-fungible token,” but if you haven’t had the chance to google what this confusing name means, let me break it down for you: put simply, non-fungible means that it is unique and cannot be replaced or replicated. These digital assets represent real-world objects like art, music, in-game items, videos and even real estate. NFTs are a part of a blockchain, typically Ethereum, which stores data and information about an NFT that makes each one unique. Sure, you can screenshot an NFT and share it all you want, but if you do not trade for the NFT on the blockchain, you do not have literal, recorded ownership of it. This is just like typical art. You can go to the museum and take a picture of the art, but you don’t own that art unless you purchase it from the museum. See what I mean?

This concept of ownership promotes the idea that NFTs are one of a kind. Their identifying data creates digital scarcity–in stark contrast to traditional digital art and creations. Limiting the supply of the NFTs pushes the value of the asset up if it is in demand.?

NFTs can be minted, or created and added on the blockchain, in collections.?Bored Ape Yacht Club?(BAYC) is one of the most famous collections. The?most expensive?BAYC NFT is currently valued at 15,001 ETH ($39,487,822.35), which is roughly $72.5 million at Ethereum’s all-time high.?

In theory, companies can make a lot of money from their NFTs. While small companies will probably spend more money creating, minting and marketing their NFTs, large companies could turn a profit. In my eyes, there are a few reasons why I see small businesses and large corporations, alike, getting involved in the NFT marketplace:

To go viral

If you get ahead of innovation, and you can get media attention, you’ll go viral. Nike saw the rise in NFTs and began?acquiring?NFT companies like RTFKT. They also started?creating shoes?with NFTs–where two-thirds of the profit will go to the University of Oregon’s football team and ten percent going to the Oregon student-athletes. This is a very simple lift for a large company that created a ton of media buzz. The company saw hundreds of articles being posted about their role in the NFT space and realign their brand image with NFT-junkies.

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To offer value to customers

FOMO is real, and FOMO sells. If a company sells an exclusive NFT collection, people will latch onto the opportunity to get their hands on the (hopefully) once-in-a-lifetime opportunity. Not only will an NFT build your brand connection to those familiar with NFTs, but it will give value to those who know how to purchase NFTs. NFTs are essentially innovative gifts that will incentivize customers to engage with your company. Not only that but purchasing an NFT creates a monetary connection to the company–like buying a product or a jersey–and will create lifelong fans of what you are doing.

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To keep up with the digital shift

While consumers are quickly gravitating toward Web 3.0, brands must follow. A legitimate way to do get a foot in the digital world is by creating an NFT. NFTs have the possibility to be a part of our everyday lives in the future. Rather than falling behind the crowd, companies are getting ahead of the trend and doing what they can to get exposure in Web 3.0

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Let’s talk about some NFT marketing in the real world. I’ll start with the New York Rangers who?launched?their NFT products in January. While they weren’t the first professional sports team to do this, the Rangers weren’t the last–and that is what is important here. I worked for the Rangers last summer and during my internship, the marketing team started working on the NFT collection. The launch, powered by?DropShop, featured NFT products and experiences ranging from digital tickets to lower bowl tickets and signed sticks. The auction contained an NFT with each win as well. The Rangers said this in a statement about the NFT launch: “We are constantly looking for fresh and innovative ways to engage with our fans, and we see the emergence of digital collectibles, which combines sports and technology, as a fun way for fans to connect with the team. Tying in the first-ever Rangers NFT products with the Henrik Lundqvist Night game is the perfect way to celebrate this.”

Taco Bell is cooking up more than just tacos in the digital age. The fast-food chain tweeted about its?taco-themed GIFs?started creating millions of mentions and tweets about their marketing efforts. The 25 unique tokens sold out in 30 minutes. One NFT is currently worth 100 ETH.

Let’s be honest here: NFTs can be, and have been, scams. The public knows this. If you google “are NFTs,” the first suggested search is “are NFTs scams.” NFT marketing can transfer this negative image to your brand. If you don’t want to look sketchy, I have a few strategies that could help your company sell some NFTs and be “hip” without looking like you are in on some shady business:

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Be honest and transparent

Every time I see a company selling an NFT, the biggest question I see is “why?” It is important for a brand to answer this question upfront. Like the Rangers, having a reason for the NFT sale helps ease the minds of worrisome customers who might want to get in on the action. Another question many people ask is “where is the money going?” While answering this question isn’t always important to answer, especially if the money is going into the company’s pocket, it can help your brand stay transparent. If you are raising money or donating a portion of the earnings to an organization, you should make this known.

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Stay on brand

Customers form loyalty to your content. This is obvious but incredibly important. Consistency is a crucial aspect of maintaining your loyal customers and brand. If you are a soccer team, creating a sports car NFT with proceeds going to feeding hungry children might not be as strategic and effective as creating trading card NFTs with proceeds funding a learn-to-play soccer event for young children. See the difference?

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Don’t sell, share

Your goal shouldn’t be to sell an NFT and make a bunch of money. This should be a byproduct. Your goal should be to share your NFTs with a story. “What are you doing?” and “why are you doing it?” should be answered upfront. You shouldn’t say, “buy this NFT so we can do this or that.” Instead, encourage your audience to get involved and emphasize how purchasing your exclusive NFT can help lead to some goal.

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My name is Matthew Rigsbee and I am a senior at the?University of North Carolina at Chapel Hill?majoring in Advertising and Public Relations at the?Hussman School of Journalism and Media. Ever since I invested in my first stock in high school, I fell in love with learning about the economy, stocks and eventually cryptocurrencies.

My goal with this blog is to highlight the intersection of the finance world with the advertising industry. There are so many new advertising techniques that are emerging out of the FinTech and cryptocurrency spaces, and I want to be your guide to understanding how many companies are leveraging these techniques to change the way people, young and old, involve themselves in the markets. I will use real-world examples of how some of the top brands in the FinTech and cryptocurrency spaces are using game-changing advertising and marketing techniques.